Apollo, others considering Sara Lee buyout: source

By IBT Staff Reporter On 01/10/11 AT 1:40 AM

A group of private equity firms including Apollo Global Management is interested in a buyout of food and beverage company Sara Lee Corp , and has made an approach to the company, a source familiar with the situation said on Sunday.

The Wall Street Journal earlier reported the news and said the consortium also includes Bain Capital and TPG Capital .

A leveraged buyout of Sara Lee, which has a market value of $11 billion, would likely be the largest since the credit crisis.

The future of Sara Lee, whose brands include Jimmy Dean sausages and Senseo coffee, has been in question for some months. The company's shares closed on Friday 3 cents lower at $17.43.

The Wall Street Journal said the consortium has met in recent weeks with Sara Lee's financial advisors to talk about a deal. Investor C. Dean Metropoulos, who is an operating partner of Apollo, is also involved, the paper said.

Sara Lee and the private equity firms were not immediately available for comment.

Bloomberg also reported on Sunday that Brazilian meat producer JBS is considering making another takeover offer for Sara Lee and its executives are traveling to the U.S. this week.

Sara Lee had been in talks to sell itself to JBS but the pair were at odds over price, a source previously told Reuters.

In November, Sara Lee sold its North American bakery business to Mexico's Grupo Bimbo for $925 million and analysts pointed out that the company's new focus, North American meats and European coffee, have little overlap.

The company has also been considering options such as separating its meats and drinks businesses, a source familiar with the matter previously told Reuters.

The company's board aims to decide by the end of January whether to break apart the company, but any decision would be dictated by the potential tax costs, a source previously told Reuters.

Sara Lee has been functioning with an interim chief executive since August when Brenda Barnes left after suffering a stroke.

Apollo has previously been interested in Sara Lee. It had approached the company with regards to a deal, a source familiar with the matter told Reuters last year. That would likely to have been struck in conjunction with Metropoulos, the source said at the time.

Metropoulos bought Pabst Blue Ribbon beer in June. He was also once the joint owner of brands such as Duncan Hines baking mixes, Vlasic pickles and Swanson frozen dinners.

(Reporting by Jessica Hall in Philadelphia and Megan Davies in New York; Editing by Tim Dobbyn)